Real-Estate Moguls Betting on a Hybrid of Canyon Ranch and Soho House

By Keiko Morris
The Wall Street Journal
August 7, 2018

Some big names in real estate think they have found a new winning formula: a venture that brings the meditative atmosphere of a desert spa resort to the heart of the world’s busiest cities.

The business, known as the Well, will combine services of medical doctors, health coaches and acupuncturists with yoga, meditation and spa services, according to its founders.

The company plans to open its first location in downtown Manhattan next year, then roll it out in places like Los Angeles, London and Hong Kong. Starwood Capital Group Chief Executive Barry Sternlicht, developer Richard LeFrak, and Mitchell Moinian, a principal at Moinian Group, are among the early investors. The company’s founder and chief executive is a former top executive at Deepak Chopra Radical Well-Being LLC.

The Well represents the latest bet by the real-estate industry that affluent urban professionals will pay up to take part in the burgeoning fitness and wellness craze.

In recent years, property developers have added high-end health clubs, meditation rooms and juice bars to their office and residential buildings. New hotel brands offer free use of running gear and yoga mats. Some even include a farmers market on the premises to ensure their guests get the freshest produce.

Mr. LeFrak said the health and wellness formula has already shown promise at the 1 Hotel South Beach in Miami, which he and other owners of the property have marketed as an environmentally friendly retreat.

“We have a vegan restaurant, a huge gym, wellness weeks, a day spa,” he said. “When you put them together, they ring the cash register.”

Not everyone is convinced the cash register will ring for the Well. Membership at the New York City club, which costs $375 monthly after a $500 registration fee, is on the high end of the city’s most luxurious fitness clubs.

The Well and similar luxury services could lack staying power during a recession, said Julie Whelan, head of occupier research for the Americas at real estate services firm CBRE Group Inc.

Studios that focus on one particular regimen such as SoulCycle or a local yoga studio tend to have the cachet of being experts in one field and offer a small-group feeling, Ms. Whelan said.  But the Well’s model of offering all these services in one place is untested.

“When you move all of that under one roof, you have to make sure there are people that can hold that passion and maintain a small-group feel, which is why people go to those places,” Ms. Whelan said.

But the creators of the Well believe that by combining rejuvenation programs found at places like Canyon Ranch resorts with the exclusivity of a private club—the first 200 Well members are invite only—they have created a business that is apt to succeed during these health-conscious times.

The Well’s founders have raised $4 million and now are raising a series A round of $6 million, aiming to use the $10 million to launch the brand and build and open the club. The club’s 13,000 square feet will include an organic restaurant and bar, which will be open to the public, a full-service spa, a classroom for workshops, a reflexology lounge, private training gym and 10 treatment rooms

The idea for the Well dates back to 2009, when CEO Rebecca Parekh was working for Deutsche Bank . Although she loved her job, she said she found herself exhausted, prompting her to go to a spa in Arizona.

“Magically, in two and a half days, I felt energized, more focused and able to think clearly,” said Ms. Parekh, who later went on to serve as chief operating officer of Deepak Chopra Radical Well-Being. “And I had this ‘aha, how do you bring this destination model to the work environment.’”

Ms. Parekh joined forces with co-founders Sarrah Hallock, a former marketing executive of food and beverages including Vitaminwater, and Kane Sarhan, who had been a vice president of Starwood Capital Group’s hotel brand management company and oversaw marketing efforts that included the launch of the 1 Hotels Brand.

Meanwhile, developers who were already loading up their buildings with gym and juice bars saw the Well as a natural extension of a health and wellness trend.

“Every single one of [our] buildings, no matter what the principal use, has some heavy consideration of wellness and fitness,” said Mr. Moinian.

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